Last week, we spent considerable righteous energy discussing rogue employers who, with no conscience or compunction whatsoever, cheat their employees out of benefits that they are entitled to as mandated by Bermuda employment law.

One reader sorrowfully wrote that he discovered ten years after the fact that his former employer never remitted any of his benefit withholdings to his government and Bermuda national pension account.

Devastated, he has never recovered financially, and is now facing a limited budget retirement. While the reader did not disclose his loss, a mere extrapolation of the annual amount (from our hypothetical employee) from last week’s benefit-loss chart of $9,000 multiplied by ten years — in excess of $100,000 a large sum lost, for ever.

Now — to the other side of the coin. The many ways that employees steal.

Honest, ethical employers who honour their financial commitments to their employees also have to cope with dishonest employees who steal consistently, without a conscious thought to the damage they wreak, all along receiving on-time, every-time paycheques.

The US Chamber of Commerce estimates that 75 per cent of all employees steal at least once.

One of every three business failures are the direct result of employee theft. Family relatives have experienced this — first hand.

The American Society of Employers report that:

• Businesses lose 20 per cent of every dollar to theft.

• 18 months is the average time to catch an employee fraud scheme.

• 55 per cent of perpetrators are managers (in positions of trust).

The United States FBI reports that employee theft is the fastest-growing crime in the US.

How do employees steal?

Hard-core blatant theft, and the much harder to document, soft core, almost-unnoticed theft.

Let me count the ways, and believe me, I think I have seen just about everything after many years in the workforce. Why scammer employees can’t devote as much energy to career advancement as they do to torpedoing their own positions, I will never understand.

Jobs are so precious these days. Everyone can be replaced. No employer can afford to keep an unmotivated, unethical, employee.

Hard-core theft

Cash: the tantalising opportunities here, generally, take place within the accounting, sales, cashiering departments, with ready access to cash, bank accounts, and accounts receivables and payables departments. Phoney or duplicate invoices, phantom accounts, cheque-signing authority without counter-signatures, etc. Unsupervised employees with access to accounts where duties are not segregated or overseen, in small businesses — far too much trust placed in a small group of employees who can collude to steal.

Trade secrets passed off in return for favours, cash, and other forms of payment.

Customer lists sold on or removed when an employee leaves the firm.

Inventory shrinkage — the industry name for stealing company products. Friends, family are the recipients of this largesse, or the “lifted” products are sold on. These employees make a practice of walking out the door with “extras”.

The justification: my boss is wealthy; he/she can afford it; the company will never miss this stuff.

Years ago, a house guest presented us with a beautiful set of bed sheets from a high-end department store. We were effusive in our thanks. Her response, not to worry — the gift didn’t cost her anything and she could get us lots more!

Her former boyfriend had a whole closet full of these items that he walked out the back door of his employer every week. I’m no paragon of virtue (readers), but this “gift” bothered me so much, I couldn’t use them. They went to goodwill.

Back of the truck deliveries: it works like this. Wholesaler employee (WE) makes a large delivery (deliberately withholding some items) to a retail business. Retail receiving clerk signs for full delivery after only a cursory item check, or colluding ignores the miscount. WE keeps the withheld items, selling them on at discounted prices (or benefiting friends and family).

Soft-core theft

This is so much harder to detect, and can be even more damaging to a company and its business reputation.

Attitude negativity: customer impressions of the retail or service business attitude become negative reactions, too. They vote with their feet.

Malicious sabotage: a new owner of a business keeps on employees of the former owner, thinking that they would be great in maintaining goodwill with clients. He inadvertently discovers that said “kept on” employees were telling existing clients that the new owner was not only incompetent, but perhaps, clients should look elsewhere for advice. These employees couldn’t understand why they were terminated for cause.

Time stealers

Time wasters: tardiness, every day more than 15 minutes late; long coffee break, lunches, social media cruising, online shopping, false call records for marketing new business, and the like.

Inefficiency: why be efficient, churning out delegated tasks in required time frames to the best of ability, when one can take one’s time deliberately and still receive a full paycheque every week?

Time wasters are not always solely inefficient. Sometimes, an entire department is complicit in working at a go-slow mode. Any efficient, forward-looking employee focused on career-performing excellence is resented, shunned and sabotaged by their peer group workers.

These are numerous examples of insidious atmospheres that, allowed to perpetuate, can destroy a business. And regrettably, in many cases, employers are not aware until it is too late.

The employer/employee relationship is a serious two-way street where each individual is codependent upon the other in a mutual bond of trust. If either person undermines that relationship, the continued viability of the business involved is in serious trouble.

Next week: Reader question — a Bermudian returns home to start a business after living abroad for a number of years. Problem is, he now has two (US and Bermuda) citizenships, a multinational spouse and children. What are his tax and reporting responsibilities now?

Martha Harris Myron CPA JSM: Masters of Law — International Tax and Financial Services. Pondstraddler Life™, financial perspectives for Bermuda islanders’ domestic affairs and international connections on the Great Atlantic Pond. Contact: martha@pondstraddler.com

Many ways that employees steal

What youNeed toKnow

1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service